California Budget Impasse Halts Flood Control Projects

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SACRAMENTO, California, December 26, 2008 (ENS) - At a Natomas levee project site in Sacramento, Governor Arnold Schwarzenegger Tuesday put the blame on the Legislature for California's growing budget shortfall. In addition, he warned that levees across the state might fail during the upcoming winter storm season because funding for infrastructure improvements is being withheld.

The lack of budget agreement between the Republican governor and the Democrat-controlled Legislature last week caused the state Pooled Money Investment Board - two Democrats, one Republican - to vote to stop $3.8 billion in state infrastructure financing over the next six months.

As a result, $234 million in financing for the Natomas Levee Improvement Program, which includes some of the most vulnerable portions of the Natomas levee system, has been halted.

"Last week the legislature asked Californians to pay higher taxes and fees without making a real attempt to put Californians back to work and help them keep their homes. Because of the legislature’s continued failure to pass a comprehensive budget solution, state funding for infrastructure projects like the Natomas levee has been stopped - leaving the community in harm’s way and halting much needed job creation and economic stimulus across California," said Governor Schwarzenegger.

The Natomas levee system shields 80,000 people from the Sacramento River and is so vulnerable that area building permits are not being issued until it is fixed.

The rapidly growing Natomas Basin area is in trouble after the U.S. Army Corps of Engineers decided last January that sections of its levee system are unsafe due to deficiencies related to levee under-seepage issues.

This levee project is part of the Natomas Levee Improvement Program spearheaded by the Sacramento Area Flood Control Authority. The project aims toprovide 200-year flood protection for the Natomas Basin, which now has less than 100-year protection.

Due to the unresolved budget shortfall, $190 million Proposition 1E and $44 million Proposition 84 funding for this project has been halted.

The ramifications of this halt include leaving the Natomas community in harm’s way for an increased period of time, the potential loss of federal matching funds for levee improvement and the loss of much needed regional job and economic stimulus brought by infrastructure investment.

Funding for 2,000 other projects across California also is in jeopardy, including the $20 million Feather River levee improvement project and the $10 million Lower Feather River setback levee at Star Bend modification in Yuba County.

The California Legislature last week attempted to raise $9.3 billion to ease the state's fiscal crisis by increasing sales taxes by three-fourths of a cent and gas taxes by 13 cents a gallon, starting in February. The plan would add a surcharge of 2.5 percent to everyone's 2009 state income tax bill.

In addition, the Democrats said they would cut $7.3 billion from schools, healthcare and other programs. Their package would total $18 billion and cut nearly half of the state's budget shortfall, calculated to reach $41.8 billion in the next 18 months.

On Friday, State Treasurer Bill Lockyer joined Assembly Speaker Karen Bass and Senate President pro Tem Darrell Steinberg to call on the governor to sign the fiscal package passed out of the legislature on Thursday.

Speaker Bass said, “We include $3 billion in new revenues for transportation projects and we also accelerate $3 billion in bonds for transportation projects. That includes $ 800 million for public transit systems, including new buses and train cars for commuters."

Bass said the legislature's plan did not "gut" the California Environmental Quality Act. "Communities trying to keep their air and water free from contamination aren’t the problem - the recession is. We did meet the governor more than halfway by easing CEQA rules for transportation projects and surplus state property. And we make it easier for hospitals to move forward with expansion and construction," she said.

Last week, Governor Schwarzenegger declared he would veto the budget bills passed by the legislature because "they fail to provide real solutions for California’s budget crisis and also fail to provide economic stimulus and mortgage relief for California."

The governor said that on November 6 he presented a budget proposal to the legislature that "would address all such issues."

Projects held up by the Pooled Money Investment Board decision include wastewater treatment plant construction in Susanville, Tracy, and Tehachapi, and at Chuckawalla Valley State Prison, as well as at least 20 California Fire agency station replacements or relcations.

Other projects with environmental impact that are being held up include - Ballona Creek Trail and Bike Path Enhancement in Los Angeles, Benton Hot Springs Valley Conservation Easement Project, and the Delta Discovery Experience at Big Break Regional Shoreline, as well as numerous wilderness and open space acquisitions, conservation easements, parks and trails projects across the state.

Writing in the "San Francisco Chronicle" today, former California Finance Director Tom Campbell said, "We're in a crisis due to the national recession. We need an answer. Democrats don't want to cut more spending, Republicans don't want to increase taxes. So let's do both. That's called "compromise." Neither side wins, but California does."

Campbell was finance director of California from 2004 to 2005. He served five terms in the U.S. House of Representatives, and one term in the state Senate, representing Silicon Valley.